This holiday season, the National Retail Federation predicts that holiday shoppers will spend about $804 per person. A survey done last year by MagnifyMoney found that people who went into debt during the holidays added average debt of $986. Some people manage to charge purchases and pay them off quickly, but that same survey found that 44 percent were stressed by the debt, and less than half of those surveyed expected to pay off their debt in five months or less.

Instead of falling into a holiday debt trap this year, take some pre-Thanksgiving time to plan your holiday shopping. Here are eight ways to help you shop smartly, stay within your budget, and make the holidays merry and debt-free.

1. Set a budget. Commit to holiday shopping with money you have, instead of going into debt. To do so, evaluate any holiday savings, and anticipated bonuses or other windfalls you can contribute to your shopping budget. Add in any penny-pinching you can do between now and the holidays, such as brown-bagging your lunch for a few weeks.

2. Compare budget to reality. List each person you will shop for and how much you hope to spend. Include holiday tips and cash gifts, travel, decorations, and meals and parties. Do you have sufficient funds? If not, try to get creative. Can you make gifts for some recipients, or draw names so that each member of a group gives only to one other person? Make a plan of what you will spend and – importantly – how you will pay before you begin shopping.

3. Plan ahead. A “budget” is really a plan. Thanks to the Internet, many retailers’ Black Friday sales ads are available online long before Black Friday. If you anticipate that items on your shopping list will go on sale, compare advertised prices ahead of time from the comfort of your home. Then make a specific list of where and what to buy. This strategy will help you avoid getting sidetracked or over-spending.

4. Search for savings. Throughout the season, watch mail, email, newspaper ads and catalogs for discount codes or offers. Coupon codes or promotion codes sometimes are available online. A quick search for the retailer’s name and “coupon code” can turn up a discount code. Smartphone or tablet computer users can try shopping apps that compare prices online and offline. Track deals in a spreadsheet or notebook to find maximum savings. Note expiration dates.

5. Count the total cost when shopping online. Shipping and sales tax can slash into a gift-giving budget. Compare costs online via shopping sites that list various retailers for an item, with list price, shipping costs and total, to identify the lowest total cost. On Dec. 18, many retailers will participate in Free Shipping Day. Visit www.freeshippingday.com to see participating retailers and sign up for an email reminder. Or look for “ship to store” options, which save time and hassle, but often eliminate shipping fees.

6. Be especially careful with plastic.Research has found that shoppers spend more when paying with a credit card. Do not be swayed by store credit card offers, either. Initial savings might look appealing, but if you cannot pay in full, the interest rate may reach 20 percent or higher. And opening multiple store credit cards in a short span of time can hurt your credit profile.

7. Don’t wait till the last minute. Starting shopping early can give you more time to find bargains. Mark off gift recipients on your list when you’ve finished shopping for them, so you do not go overboard.

8. Protect yourself online. Protect every computer in your home with anti-virus and anti-spyware programs, and make sure they are current. When you set up an online account, be creative with your password. Never use obvious information such as birthdays, maiden names, family names or consecutive numbers. Avoid using debit cards online, as they can give identity thieves access to your bank account. Instead, complete online shopping using PayPal (which can transfer funds directly and securely from a checking or savings account) or use one dedicated credit card, which makes it easier to track spending. Keep careful track of purchases so you do not charge more than you can pay in full.

With some careful planning, the holidays can be festive and debt-free. Whether you hit the stores on Black Friday, or wait until later, paying with the money you have allows you to enjoy the holidays without worrying about a holiday debt hangover. And the feeling of freedom from debt can make holiday celebrations even sweeter.

Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.

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